A blog of the NYU Colloquium on Market Institutions and the Leipzig Colloquium on the Market Order

The Ride-Hailing Vehicle Cap

About two weeks ago, City Council in New York City voted to ban ride-hailing services (Uber, Lyft, Via, Juno) from adding new drivers for a year—with the exception of wheelchair accessible vehicles. The main justification for this cap is that ride-hailing services have been leading to reductions in vehicular speeds and causing road congestion in Manhattan’s busiest areas.

Would a cap on ride-hailing services reduce road congestion? I analyze this proposal in my recent New York Times op-ed and point to how the reductions in vehicular speeds started long before ride-hailing took off (and the pattern did not change after ride-hailing). Furthermore, a study commissioned by the mayor’s office in 2015 also found that ride-hailing did not contribute to the reductions in speed, and pointed to the primary factors of increased freight movement, construction activity, and tourism, population, and job growth.

An excerpt:

Critics may dismiss this report by pointing to a 60 percent jump, since 2015, in for-hire vehicles. But according to a recent New York City Department of Transportation study on traffic speeds in Manhattan’s central business district, between 2015 and 2017, traffic speeds fell by about 4 percent. From 2010 to 2014, before ride hailing took off, speeds fell by 12.1 percent. In fact, every year before 2015 the reduction in speed was greater than the yearly reductions in speed after 2015. The sharpest reductions in speed were between 2012-13 and 2014-15 — i.e., before ride-hailing “conquered” Manhattan.

Lastly, I discuss the subway substitution claims and conclude with discussing a better solution to curb traffic: congestion pricing.